Note: This problem is for the 2019 tax year. Lance H. and Wanda B. Dean are...

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Note: This problem is for the 2019 tax year. Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income- City of Albuquerque general purpose bonds $1,000 Ford Motor company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payments from John Allen 7,200 Annual gifts from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2018) 400 Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child support-the alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained. The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) $7,200 Taxes- Property taxes on personal residence $3,600 State of New Mexico income tax (includes amount withheld from wages during 2019) 4,200 7,800 Interest on home mortgage (First National Bank) 6,000 Charitable contributions 3,600 Life insurance premiums (policy on Lance's life) 1,200 Contribution to traditional IRA (on Wanda's behalf) 5,000 Traffic fines 300 Contribution to the reelection campaign fund of the mayor of Santa Fe 500 Funeral expenses for Wayne Boyle 6,300 The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Deans' household includes the following, for whom they provide more than half of the support: Social Security Number Birth Date Lance Dean (age 42) 123-45-6786 12/16/1977 Wanda Dean (age 40) 123-45-6787 08/08/1979 Penny Allen (age 19) 123-45-6788 10/09/2000 Kyle Allen (age 17) 123-45-6780 05/03/2003 Wayne Boyle (age 75) 123-45-6785 06/15/1944 Penny graduated from high school on May 9, 2019, and is undecided about college. During 2019, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. Required: Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to complete this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. • Make realistic assumptions about any missing data. • Enter all amounts as positive numbers. • If an amount box does not require an entry or the answer is zero, enter "0". • Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2019 IRS Use Only OMB No. 1545-0074 Filing Status Married filing jointly v Your first name and middle initial Last name Your social security number Lance H. Dean 123-45-6786 If joint return, spouse's first name and middle initial Last name Spouse's social security Wanda B. Dean number 123-45-6787 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election 431 Yucca Drive Campaign Check here if you, or your spouse if filing jointly, want $3 to go to City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below this fund. Checking a box below (see instructions). will not change your tax or Santa Fe, NM 87501 refund. None v Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and v here O Standard Someone can claim: None v Deduction You: None Age/Blindness Spouse: None v Dependents (see instructions): (2) Social security number (3) Relationship to you (4) v if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents Penny Allen 123-45-6788 Child No v Yes v Kyle Allen 123-45-6780 Child Yes v No v Wayne Boyle 123-45-6785 Parent No v Yes v 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 101,000 b Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 2a 1,000 if required 1,500 2b Standard b Ordinary dividends. Attach Sch. 3a Qualified dividends . .. За Deduction for- B if required 3b • Single or Married filing 4a IRA distributions . 4a b Taxable amount . 4b Pensions and annuities 4c d Taxable amount 4d separately, $12,200 • Married filing jointly or Qualifying widow(er), $24,400 • Head of 5a Social security benefits 5a b Taxable amount. 5b Capital gain or (loss). Attach Schedule D if required. If not required, check here... 6 7a Other income from Schedule 1, line 9 600 7a b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income. 7b 103,100 V household, $18,350 • If you checked 8a Adjustments to income from Schedule 1, line 22.. 8a 5,000 b Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under $16,550 • If you checked Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under Standard Standard deduction or itemized deductions (from Deduction, see Schedule A) 24,400 9 instructions. 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A. 10 1la Add lines 9 and 10 24,400 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter -0-. ... .. 11b 73,700 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Lance H. and Wanda B. Dean 123-45-6786 Page 2 12a Tax (see inst.) Check if any from Form(s): 10 8814 2 0 4972 3 0 49,300 X 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents. 3,000 13a b Add Schedule 3, line 7, and line 13a and enter the total 13Ь 14 Subtract line 13b from line 12b. If zero or less, enter -0- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax. 16 17 Federal income tax withheld from Forms W-2 and 1099 5,700 17 • If you have a 18 Other payments and refundable credits: . qualifying child, a Earned income credit (EIC). ... 18a attach Sch. EIC. • If you have b Additional child tax credit. Attach Schedule 8812 . 18b nontaxable c American opportunity credit from Form 8863, line 8 18c combat pay, see instructions. d Schedule 3, line 14. . .. 18d e Add lines 18a through 18d. These are your total other payments and refundable credits .. 18e 19 Add lines 17 and 18e. These are your total payments 5,700 V 19 Refund 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 20 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here >o 21a Direct deposit? •b Routing number >c Type: D Checking o Savings See instructions. Account number 22 Amount of line 20 you want applied to your 2020 estimated tax... 22 Amount 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. 23 Note: This problem is for the 2019 tax year. Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income- City of Albuquerque general purpose bonds $1,000 Ford Motor company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payments from John Allen 7,200 Annual gifts from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2018) 400 Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child support-the alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained. The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) $7,200 Taxes- Property taxes on personal residence $3,600 State of New Mexico income tax (includes amount withheld from wages during 2019) 4,200 7,800 Interest on home mortgage (First National Bank) 6,000 Charitable contributions 3,600 Life insurance premiums (policy on Lance's life) 1,200 Contribution to traditional IRA (on Wanda's behalf) 5,000 Traffic fines 300 Contribution to the reelection campaign fund of the mayor of Santa Fe 500 Funeral expenses for Wayne Boyle 6,300 The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Deans' household includes the following, for whom they provide more than half of the support: Social Security Number Birth Date Lance Dean (age 42) 123-45-6786 12/16/1977 Wanda Dean (age 40) 123-45-6787 08/08/1979 Penny Allen (age 19) 123-45-6788 10/09/2000 Kyle Allen (age 17) 123-45-6780 05/03/2003 Wayne Boyle (age 75) 123-45-6785 06/15/1944 Penny graduated from high school on May 9, 2019, and is undecided about college. During 2019, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. Required: Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to complete this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. • Make realistic assumptions about any missing data. • Enter all amounts as positive numbers. • If an amount box does not require an entry or the answer is zero, enter "0". • Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2019 IRS Use Only OMB No. 1545-0074 Filing Status Married filing jointly v Your first name and middle initial Last name Your social security number Lance H. Dean 123-45-6786 If joint return, spouse's first name and middle initial Last name Spouse's social security Wanda B. Dean number 123-45-6787 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election 431 Yucca Drive Campaign Check here if you, or your spouse if filing jointly, want $3 to go to City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below this fund. Checking a box below (see instructions). will not change your tax or Santa Fe, NM 87501 refund. None v Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and v here O Standard Someone can claim: None v Deduction You: None Age/Blindness Spouse: None v Dependents (see instructions): (2) Social security number (3) Relationship to you (4) v if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents Penny Allen 123-45-6788 Child No v Yes v Kyle Allen 123-45-6780 Child Yes v No v Wayne Boyle 123-45-6785 Parent No v Yes v 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 101,000 b Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 2a 1,000 if required 1,500 2b Standard b Ordinary dividends. Attach Sch. 3a Qualified dividends . .. За Deduction for- B if required 3b • Single or Married filing 4a IRA distributions . 4a b Taxable amount . 4b Pensions and annuities 4c d Taxable amount 4d separately, $12,200 • Married filing jointly or Qualifying widow(er), $24,400 • Head of 5a Social security benefits 5a b Taxable amount. 5b Capital gain or (loss). Attach Schedule D if required. If not required, check here... 6 7a Other income from Schedule 1, line 9 600 7a b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income. 7b 103,100 V household, $18,350 • If you checked 8a Adjustments to income from Schedule 1, line 22.. 8a 5,000 b Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under $16,550 • If you checked Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under Standard Standard deduction or itemized deductions (from Deduction, see Schedule A) 24,400 9 instructions. 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A. 10 1la Add lines 9 and 10 24,400 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter -0-. ... .. 11b 73,700 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Lance H. and Wanda B. Dean 123-45-6786 Page 2 12a Tax (see inst.) Check if any from Form(s): 10 8814 2 0 4972 3 0 49,300 X 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents. 3,000 13a b Add Schedule 3, line 7, and line 13a and enter the total 13Ь 14 Subtract line 13b from line 12b. If zero or less, enter -0- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax. 16 17 Federal income tax withheld from Forms W-2 and 1099 5,700 17 • If you have a 18 Other payments and refundable credits: . qualifying child, a Earned income credit (EIC). ... 18a attach Sch. EIC. • If you have b Additional child tax credit. Attach Schedule 8812 . 18b nontaxable c American opportunity credit from Form 8863, line 8 18c combat pay, see instructions. d Schedule 3, line 14. . .. 18d e Add lines 18a through 18d. These are your total other payments and refundable credits .. 18e 19 Add lines 17 and 18e. These are your total payments 5,700 V 19 Refund 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 20 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here >o 21a Direct deposit? •b Routing number >c Type: D Checking o Savings See instructions. Account number 22 Amount of line 20 you want applied to your 2020 estimated tax... 22 Amount 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. 23 Note: This problem is for the 2019 tax year. Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income- City of Albuquerque general purpose bonds $1,000 Ford Motor company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payments from John Allen 7,200 Annual gifts from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2018) 400 Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child support-the alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained. The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) $7,200 Taxes- Property taxes on personal residence $3,600 State of New Mexico income tax (includes amount withheld from wages during 2019) 4,200 7,800 Interest on home mortgage (First National Bank) 6,000 Charitable contributions 3,600 Life insurance premiums (policy on Lance's life) 1,200 Contribution to traditional IRA (on Wanda's behalf) 5,000 Traffic fines 300 Contribution to the reelection campaign fund of the mayor of Santa Fe 500 Funeral expenses for Wayne Boyle 6,300 The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Deans' household includes the following, for whom they provide more than half of the support: Social Security Number Birth Date Lance Dean (age 42) 123-45-6786 12/16/1977 Wanda Dean (age 40) 123-45-6787 08/08/1979 Penny Allen (age 19) 123-45-6788 10/09/2000 Kyle Allen (age 17) 123-45-6780 05/03/2003 Wayne Boyle (age 75) 123-45-6785 06/15/1944 Penny graduated from high school on May 9, 2019, and is undecided about college. During 2019, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. Required: Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to complete this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. • Make realistic assumptions about any missing data. • Enter all amounts as positive numbers. • If an amount box does not require an entry or the answer is zero, enter "0". • Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2019 IRS Use Only OMB No. 1545-0074 Filing Status Married filing jointly v Your first name and middle initial Last name Your social security number Lance H. Dean 123-45-6786 If joint return, spouse's first name and middle initial Last name Spouse's social security Wanda B. Dean number 123-45-6787 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election 431 Yucca Drive Campaign Check here if you, or your spouse if filing jointly, want $3 to go to City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below this fund. Checking a box below (see instructions). will not change your tax or Santa Fe, NM 87501 refund. None v Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and v here O Standard Someone can claim: None v Deduction You: None Age/Blindness Spouse: None v Dependents (see instructions): (2) Social security number (3) Relationship to you (4) v if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents Penny Allen 123-45-6788 Child No v Yes v Kyle Allen 123-45-6780 Child Yes v No v Wayne Boyle 123-45-6785 Parent No v Yes v 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 101,000 b Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 2a 1,000 if required 1,500 2b Standard b Ordinary dividends. Attach Sch. 3a Qualified dividends . .. За Deduction for- B if required 3b • Single or Married filing 4a IRA distributions . 4a b Taxable amount . 4b Pensions and annuities 4c d Taxable amount 4d separately, $12,200 • Married filing jointly or Qualifying widow(er), $24,400 • Head of 5a Social security benefits 5a b Taxable amount. 5b Capital gain or (loss). Attach Schedule D if required. If not required, check here... 6 7a Other income from Schedule 1, line 9 600 7a b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income. 7b 103,100 V household, $18,350 • If you checked 8a Adjustments to income from Schedule 1, line 22.. 8a 5,000 b Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under $16,550 • If you checked Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under Standard Standard deduction or itemized deductions (from Deduction, see Schedule A) 24,400 9 instructions. 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A. 10 1la Add lines 9 and 10 24,400 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter -0-. ... .. 11b 73,700 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Lance H. and Wanda B. Dean 123-45-6786 Page 2 12a Tax (see inst.) Check if any from Form(s): 10 8814 2 0 4972 3 0 49,300 X 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents. 3,000 13a b Add Schedule 3, line 7, and line 13a and enter the total 13Ь 14 Subtract line 13b from line 12b. If zero or less, enter -0- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax. 16 17 Federal income tax withheld from Forms W-2 and 1099 5,700 17 • If you have a 18 Other payments and refundable credits: . qualifying child, a Earned income credit (EIC). ... 18a attach Sch. EIC. • If you have b Additional child tax credit. Attach Schedule 8812 . 18b nontaxable c American opportunity credit from Form 8863, line 8 18c combat pay, see instructions. d Schedule 3, line 14. . .. 18d e Add lines 18a through 18d. These are your total other payments and refundable credits .. 18e 19 Add lines 17 and 18e. These are your total payments 5,700 V 19 Refund 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 20 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here >o 21a Direct deposit? •b Routing number >c Type: D Checking o Savings See instructions. Account number 22 Amount of line 20 you want applied to your 2020 estimated tax... 22 Amount 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. 23 Note: This problem is for the 2019 tax year. Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income- City of Albuquerque general purpose bonds $1,000 Ford Motor company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payments from John Allen 7,200 Annual gifts from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2018) 400 Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child support-the alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained. The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) $7,200 Taxes- Property taxes on personal residence $3,600 State of New Mexico income tax (includes amount withheld from wages during 2019) 4,200 7,800 Interest on home mortgage (First National Bank) 6,000 Charitable contributions 3,600 Life insurance premiums (policy on Lance's life) 1,200 Contribution to traditional IRA (on Wanda's behalf) 5,000 Traffic fines 300 Contribution to the reelection campaign fund of the mayor of Santa Fe 500 Funeral expenses for Wayne Boyle 6,300 The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Deans' household includes the following, for whom they provide more than half of the support: Social Security Number Birth Date Lance Dean (age 42) 123-45-6786 12/16/1977 Wanda Dean (age 40) 123-45-6787 08/08/1979 Penny Allen (age 19) 123-45-6788 10/09/2000 Kyle Allen (age 17) 123-45-6780 05/03/2003 Wayne Boyle (age 75) 123-45-6785 06/15/1944 Penny graduated from high school on May 9, 2019, and is undecided about college. During 2019, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. Required: Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to complete this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. • Make realistic assumptions about any missing data. • Enter all amounts as positive numbers. • If an amount box does not require an entry or the answer is zero, enter "0". • Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2019 IRS Use Only OMB No. 1545-0074 Filing Status Married filing jointly v Your first name and middle initial Last name Your social security number Lance H. Dean 123-45-6786 If joint return, spouse's first name and middle initial Last name Spouse's social security Wanda B. Dean number 123-45-6787 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election 431 Yucca Drive Campaign Check here if you, or your spouse if filing jointly, want $3 to go to City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below this fund. Checking a box below (see instructions). will not change your tax or Santa Fe, NM 87501 refund. None v Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and v here O Standard Someone can claim: None v Deduction You: None Age/Blindness Spouse: None v Dependents (see instructions): (2) Social security number (3) Relationship to you (4) v if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents Penny Allen 123-45-6788 Child No v Yes v Kyle Allen 123-45-6780 Child Yes v No v Wayne Boyle 123-45-6785 Parent No v Yes v 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 101,000 b Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 2a 1,000 if required 1,500 2b Standard b Ordinary dividends. Attach Sch. 3a Qualified dividends . .. За Deduction for- B if required 3b • Single or Married filing 4a IRA distributions . 4a b Taxable amount . 4b Pensions and annuities 4c d Taxable amount 4d separately, $12,200 • Married filing jointly or Qualifying widow(er), $24,400 • Head of 5a Social security benefits 5a b Taxable amount. 5b Capital gain or (loss). Attach Schedule D if required. If not required, check here... 6 7a Other income from Schedule 1, line 9 600 7a b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income. 7b 103,100 V household, $18,350 • If you checked 8a Adjustments to income from Schedule 1, line 22.. 8a 5,000 b Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under $16,550 • If you checked Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under Standard Standard deduction or itemized deductions (from Deduction, see Schedule A) 24,400 9 instructions. 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A. 10 1la Add lines 9 and 10 24,400 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter -0-. ... .. 11b 73,700 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Lance H. and Wanda B. Dean 123-45-6786 Page 2 12a Tax (see inst.) Check if any from Form(s): 10 8814 2 0 4972 3 0 49,300 X 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents. 3,000 13a b Add Schedule 3, line 7, and line 13a and enter the total 13Ь 14 Subtract line 13b from line 12b. If zero or less, enter -0- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax. 16 17 Federal income tax withheld from Forms W-2 and 1099 5,700 17 • If you have a 18 Other payments and refundable credits: . qualifying child, a Earned income credit (EIC). ... 18a attach Sch. EIC. • If you have b Additional child tax credit. Attach Schedule 8812 . 18b nontaxable c American opportunity credit from Form 8863, line 8 18c combat pay, see instructions. d Schedule 3, line 14. . .. 18d e Add lines 18a through 18d. These are your total other payments and refundable credits .. 18e 19 Add lines 17 and 18e. These are your total payments 5,700 V 19 Refund 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 20 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here >o 21a Direct deposit? •b Routing number >c Type: D Checking o Savings See instructions. Account number 22 Amount of line 20 you want applied to your 2020 estimated tax... 22 Amount 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. 23 Note: This problem is for the 2019 tax year. Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income- City of Albuquerque general purpose bonds $1,000 Ford Motor company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payments from John Allen 7,200 Annual gifts from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2018) 400 Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child support-the alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained. The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) $7,200 Taxes- Property taxes on personal residence $3,600 State of New Mexico income tax (includes amount withheld from wages during 2019) 4,200 7,800 Interest on home mortgage (First National Bank) 6,000 Charitable contributions 3,600 Life insurance premiums (policy on Lance's life) 1,200 Contribution to traditional IRA (on Wanda's behalf) 5,000 Traffic fines 300 Contribution to the reelection campaign fund of the mayor of Santa Fe 500 Funeral expenses for Wayne Boyle 6,300 The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Deans' household includes the following, for whom they provide more than half of the support: Social Security Number Birth Date Lance Dean (age 42) 123-45-6786 12/16/1977 Wanda Dean (age 40) 123-45-6787 08/08/1979 Penny Allen (age 19) 123-45-6788 10/09/2000 Kyle Allen (age 17) 123-45-6780 05/03/2003 Wayne Boyle (age 75) 123-45-6785 06/15/1944 Penny graduated from high school on May 9, 2019, and is undecided about college. During 2019, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. Required: Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to complete this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. • Make realistic assumptions about any missing data. • Enter all amounts as positive numbers. • If an amount box does not require an entry or the answer is zero, enter "0". • Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2019 IRS Use Only OMB No. 1545-0074 Filing Status Married filing jointly v Your first name and middle initial Last name Your social security number Lance H. Dean 123-45-6786 If joint return, spouse's first name and middle initial Last name Spouse's social security Wanda B. Dean number 123-45-6787 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election 431 Yucca Drive Campaign Check here if you, or your spouse if filing jointly, want $3 to go to City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below this fund. Checking a box below (see instructions). will not change your tax or Santa Fe, NM 87501 refund. None v Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and v here O Standard Someone can claim: None v Deduction You: None Age/Blindness Spouse: None v Dependents (see instructions): (2) Social security number (3) Relationship to you (4) v if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents Penny Allen 123-45-6788 Child No v Yes v Kyle Allen 123-45-6780 Child Yes v No v Wayne Boyle 123-45-6785 Parent No v Yes v 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 101,000 b Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 2a 1,000 if required 1,500 2b Standard b Ordinary dividends. Attach Sch. 3a Qualified dividends . .. За Deduction for- B if required 3b • Single or Married filing 4a IRA distributions . 4a b Taxable amount . 4b Pensions and annuities 4c d Taxable amount 4d separately, $12,200 • Married filing jointly or Qualifying widow(er), $24,400 • Head of 5a Social security benefits 5a b Taxable amount. 5b Capital gain or (loss). Attach Schedule D if required. If not required, check here... 6 7a Other income from Schedule 1, line 9 600 7a b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income. 7b 103,100 V household, $18,350 • If you checked 8a Adjustments to income from Schedule 1, line 22.. 8a 5,000 b Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under $16,550 • If you checked Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under Standard Standard deduction or itemized deductions (from Deduction, see Schedule A) 24,400 9 instructions. 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A. 10 1la Add lines 9 and 10 24,400 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter -0-. ... .. 11b 73,700 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Lance H. and Wanda B. Dean 123-45-6786 Page 2 12a Tax (see inst.) Check if any from Form(s): 10 8814 2 0 4972 3 0 49,300 X 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents. 3,000 13a b Add Schedule 3, line 7, and line 13a and enter the total 13Ь 14 Subtract line 13b from line 12b. If zero or less, enter -0- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax. 16 17 Federal income tax withheld from Forms W-2 and 1099 5,700 17 • If you have a 18 Other payments and refundable credits: . qualifying child, a Earned income credit (EIC). ... 18a attach Sch. EIC. • If you have b Additional child tax credit. Attach Schedule 8812 . 18b nontaxable c American opportunity credit from Form 8863, line 8 18c combat pay, see instructions. d Schedule 3, line 14. . .. 18d e Add lines 18a through 18d. These are your total other payments and refundable credits .. 18e 19 Add lines 17 and 18e. These are your total payments 5,700 V 19 Refund 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 20 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here >o 21a Direct deposit? •b Routing number >c Type: D Checking o Savings See instructions. Account number 22 Amount of line 20 you want applied to your 2020 estimated tax... 22 Amount 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. 23 Note: This problem is for the 2019 tax year. Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income- City of Albuquerque general purpose bonds $1,000 Ford Motor company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payments from John Allen 7,200 Annual gifts from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2018) 400 Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child support-the alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained. The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) $7,200 Taxes- Property taxes on personal residence $3,600 State of New Mexico income tax (includes amount withheld from wages during 2019) 4,200 7,800 Interest on home mortgage (First National Bank) 6,000 Charitable contributions 3,600 Life insurance premiums (policy on Lance's life) 1,200 Contribution to traditional IRA (on Wanda's behalf) 5,000 Traffic fines 300 Contribution to the reelection campaign fund of the mayor of Santa Fe 500 Funeral expenses for Wayne Boyle 6,300 The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Deans' household includes the following, for whom they provide more than half of the support: Social Security Number Birth Date Lance Dean (age 42) 123-45-6786 12/16/1977 Wanda Dean (age 40) 123-45-6787 08/08/1979 Penny Allen (age 19) 123-45-6788 10/09/2000 Kyle Allen (age 17) 123-45-6780 05/03/2003 Wayne Boyle (age 75) 123-45-6785 06/15/1944 Penny graduated from high school on May 9, 2019, and is undecided about college. During 2019, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. Required: Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to complete this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. • Make realistic assumptions about any missing data. • Enter all amounts as positive numbers. • If an amount box does not require an entry or the answer is zero, enter "0". • Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2019 IRS Use Only OMB No. 1545-0074 Filing Status Married filing jointly v Your first name and middle initial Last name Your social security number Lance H. Dean 123-45-6786 If joint return, spouse's first name and middle initial Last name Spouse's social security Wanda B. Dean number 123-45-6787 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election 431 Yucca Drive Campaign Check here if you, or your spouse if filing jointly, want $3 to go to City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below this fund. Checking a box below (see instructions). will not change your tax or Santa Fe, NM 87501 refund. None v Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and v here O Standard Someone can claim: None v Deduction You: None Age/Blindness Spouse: None v Dependents (see instructions): (2) Social security number (3) Relationship to you (4) v if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents Penny Allen 123-45-6788 Child No v Yes v Kyle Allen 123-45-6780 Child Yes v No v Wayne Boyle 123-45-6785 Parent No v Yes v 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 101,000 b Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 2a 1,000 if required 1,500 2b Standard b Ordinary dividends. Attach Sch. 3a Qualified dividends . .. За Deduction for- B if required 3b • Single or Married filing 4a IRA distributions . 4a b Taxable amount . 4b Pensions and annuities 4c d Taxable amount 4d separately, $12,200 • Married filing jointly or Qualifying widow(er), $24,400 • Head of 5a Social security benefits 5a b Taxable amount. 5b Capital gain or (loss). Attach Schedule D if required. If not required, check here... 6 7a Other income from Schedule 1, line 9 600 7a b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income. 7b 103,100 V household, $18,350 • If you checked 8a Adjustments to income from Schedule 1, line 22.. 8a 5,000 b Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under $16,550 • If you checked Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under Standard Standard deduction or itemized deductions (from Deduction, see Schedule A) 24,400 9 instructions. 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A. 10 1la Add lines 9 and 10 24,400 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter -0-. ... .. 11b 73,700 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Lance H. and Wanda B. Dean 123-45-6786 Page 2 12a Tax (see inst.) Check if any from Form(s): 10 8814 2 0 4972 3 0 49,300 X 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents. 3,000 13a b Add Schedule 3, line 7, and line 13a and enter the total 13Ь 14 Subtract line 13b from line 12b. If zero or less, enter -0- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax. 16 17 Federal income tax withheld from Forms W-2 and 1099 5,700 17 • If you have a 18 Other payments and refundable credits: . qualifying child, a Earned income credit (EIC). ... 18a attach Sch. EIC. • If you have b Additional child tax credit. Attach Schedule 8812 . 18b nontaxable c American opportunity credit from Form 8863, line 8 18c combat pay, see instructions. d Schedule 3, line 14. . .. 18d e Add lines 18a through 18d. These are your total other payments and refundable credits .. 18e 19 Add lines 17 and 18e. These are your total payments 5,700 V 19 Refund 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 20 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here >o 21a Direct deposit? •b Routing number >c Type: D Checking o Savings See instructions. Account number 22 Amount of line 20 you want applied to your 2020 estimated tax... 22 Amount 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. 23 Note: This problem is for the 2019 tax year. Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income- City of Albuquerque general purpose bonds $1,000 Ford Motor company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payments from John Allen 7,200 Annual gifts from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2018) 400 Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child support-the alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained. The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) $7,200 Taxes- Property taxes on personal residence $3,600 State of New Mexico income tax (includes amount withheld from wages during 2019) 4,200 7,800 Interest on home mortgage (First National Bank) 6,000 Charitable contributions 3,600 Life insurance premiums (policy on Lance's life) 1,200 Contribution to traditional IRA (on Wanda's behalf) 5,000 Traffic fines 300 Contribution to the reelection campaign fund of the mayor of Santa Fe 500 Funeral expenses for Wayne Boyle 6,300 The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Deans' household includes the following, for whom they provide more than half of the support: Social Security Number Birth Date Lance Dean (age 42) 123-45-6786 12/16/1977 Wanda Dean (age 40) 123-45-6787 08/08/1979 Penny Allen (age 19) 123-45-6788 10/09/2000 Kyle Allen (age 17) 123-45-6780 05/03/2003 Wayne Boyle (age 75) 123-45-6785 06/15/1944 Penny graduated from high school on May 9, 2019, and is undecided about college. During 2019, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. Required: Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to complete this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. • Make realistic assumptions about any missing data. • Enter all amounts as positive numbers. • If an amount box does not require an entry or the answer is zero, enter "0". • Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2019 IRS Use Only OMB No. 1545-0074 Filing Status Married filing jointly v Your first name and middle initial Last name Your social security number Lance H. Dean 123-45-6786 If joint return, spouse's first name and middle initial Last name Spouse's social security Wanda B. Dean number 123-45-6787 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election 431 Yucca Drive Campaign Check here if you, or your spouse if filing jointly, want $3 to go to City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below this fund. Checking a box below (see instructions). will not change your tax or Santa Fe, NM 87501 refund. None v Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and v here O Standard Someone can claim: None v Deduction You: None Age/Blindness Spouse: None v Dependents (see instructions): (2) Social security number (3) Relationship to you (4) v if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents Penny Allen 123-45-6788 Child No v Yes v Kyle Allen 123-45-6780 Child Yes v No v Wayne Boyle 123-45-6785 Parent No v Yes v 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 101,000 b Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 2a 1,000 if required 1,500 2b Standard b Ordinary dividends. Attach Sch. 3a Qualified dividends . .. За Deduction for- B if required 3b • Single or Married filing 4a IRA distributions . 4a b Taxable amount . 4b Pensions and annuities 4c d Taxable amount 4d separately, $12,200 • Married filing jointly or Qualifying widow(er), $24,400 • Head of 5a Social security benefits 5a b Taxable amount. 5b Capital gain or (loss). Attach Schedule D if required. If not required, check here... 6 7a Other income from Schedule 1, line 9 600 7a b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income. 7b 103,100 V household, $18,350 • If you checked 8a Adjustments to income from Schedule 1, line 22.. 8a 5,000 b Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under $16,550 • If you checked Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under Standard Standard deduction or itemized deductions (from Deduction, see Schedule A) 24,400 9 instructions. 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A. 10 1la Add lines 9 and 10 24,400 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter -0-. ... .. 11b 73,700 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Lance H. and Wanda B. Dean 123-45-6786 Page 2 12a Tax (see inst.) Check if any from Form(s): 10 8814 2 0 4972 3 0 49,300 X 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents. 3,000 13a b Add Schedule 3, line 7, and line 13a and enter the total 13Ь 14 Subtract line 13b from line 12b. If zero or less, enter -0- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax. 16 17 Federal income tax withheld from Forms W-2 and 1099 5,700 17 • If you have a 18 Other payments and refundable credits: . qualifying child, a Earned income credit (EIC). ... 18a attach Sch. EIC. • If you have b Additional child tax credit. Attach Schedule 8812 . 18b nontaxable c American opportunity credit from Form 8863, line 8 18c combat pay, see instructions. d Schedule 3, line 14. . .. 18d e Add lines 18a through 18d. These are your total other payments and refundable credits .. 18e 19 Add lines 17 and 18e. These are your total payments 5,700 V 19 Refund 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 20 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here >o 21a Direct deposit? •b Routing number >c Type: D Checking o Savings See instructions. Account number 22 Amount of line 20 you want applied to your 2020 estimated tax... 22 Amount 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. 23 Note: This problem is for the 2019 tax year. Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2019, the Deans had the following receipts: Salaries ($60,000 for Lance, $41,000 for Wanda) $101,000 Interest income- City of Albuquerque general purpose bonds $1,000 Ford Motor company bonds 1,100 Ally Bank certificate of deposit 400 2,500 Child support payments from John Allen 7,200 Annual gifts from parents 26,000 Settlement from Roadrunner Touring Company 90,000 Lottery winnings 600 Federal income tax refund (for tax year 2018) 400 Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child support-the alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred $90,000 to her in settlement of the personal injuries she sustained. The Deans had the following expenditures for 2019: Medical expenses (not covered by insurance) $7,200 Taxes- Property taxes on personal residence $3,600 State of New Mexico income tax (includes amount withheld from wages during 2019) 4,200 7,800 Interest on home mortgage (First National Bank) 6,000 Charitable contributions 3,600 Life insurance premiums (policy on Lance's life) 1,200 Contribution to traditional IRA (on Wanda's behalf) 5,000 Traffic fines 300 Contribution to the reelection campaign fund of the mayor of Santa Fe 500 Funeral expenses for Wayne Boyle 6,300 The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employer's pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Deans' household includes the following, for whom they provide more than half of the support: Social Security Number Birth Date Lance Dean (age 42) 123-45-6786 12/16/1977 Wanda Dean (age 40) 123-45-6787 08/08/1979 Penny Allen (age 19) 123-45-6788 10/09/2000 Kyle Allen (age 17) 123-45-6780 05/03/2003 Wayne Boyle (age 75) 123-45-6785 06/15/1944 Penny graduated from high school on May 9, 2019, and is undecided about college. During 2019, she earned $8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wanda's widower father who died on December 20, 2019. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is $3,900 (Lance) and $1,800 (Wanda). The proper amount of Social Security and Medicare tax was withheld. Required: Determine the Federal income tax for 2019 for the Deans on a joint return by completing the appropriate forms. Use Form 1040 and Schedule 1 to complete this tax return. They do not own and did not use any virtual currency during the year, and they do not want to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. • Make realistic assumptions about any missing data. • Enter all amounts as positive numbers. • If an amount box does not require an entry or the answer is zero, enter "0". • Use the tax rate schedules included with this problem. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2019 IRS Use Only OMB No. 1545-0074 Filing Status Married filing jointly v Your first name and middle initial Last name Your social security number Lance H. Dean 123-45-6786 If joint return, spouse's first name and middle initial Last name Spouse's social security Wanda B. Dean number 123-45-6787 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election 431 Yucca Drive Campaign Check here if you, or your spouse if filing jointly, want $3 to go to City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below this fund. Checking a box below (see instructions). will not change your tax or Santa Fe, NM 87501 refund. None v Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and v here O Standard Someone can claim: None v Deduction You: None Age/Blindness Spouse: None v Dependents (see instructions): (2) Social security number (3) Relationship to you (4) v if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents Penny Allen 123-45-6788 Child No v Yes v Kyle Allen 123-45-6780 Child Yes v No v Wayne Boyle 123-45-6785 Parent No v Yes v 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 101,000 b Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 2a 1,000 if required 1,500 2b Standard b Ordinary dividends. Attach Sch. 3a Qualified dividends . .. За Deduction for- B if required 3b • Single or Married filing 4a IRA distributions . 4a b Taxable amount . 4b Pensions and annuities 4c d Taxable amount 4d separately, $12,200 • Married filing jointly or Qualifying widow(er), $24,400 • Head of 5a Social security benefits 5a b Taxable amount. 5b Capital gain or (loss). Attach Schedule D if required. If not required, check here... 6 7a Other income from Schedule 1, line 9 600 7a b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income. 7b 103,100 V household, $18,350 • If you checked 8a Adjustments to income from Schedule 1, line 22.. 8a 5,000 b Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under $16,550 • If you checked Subtract line 8a from line 7b. This is your adjusted gross income 8b 98,100 any box under Standard Standard deduction or itemized deductions (from Deduction, see Schedule A) 24,400 9 instructions. 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A. 10 1la Add lines 9 and 10 24,400 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter -0-. ... .. 11b 73,700 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Lance H. and Wanda B. Dean 123-45-6786 Page 2 12a Tax (see inst.) Check if any from Form(s): 10 8814 2 0 4972 3 0 49,300 X 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents. 3,000 13a b Add Schedule 3, line 7, and line 13a and enter the total 13Ь 14 Subtract line 13b from line 12b. If zero or less, enter -0- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax. 16 17 Federal income tax withheld from Forms W-2 and 1099 5,700 17 • If you have a 18 Other payments and refundable credits: . qualifying child, a Earned income credit (EIC). ... 18a attach Sch. EIC. • If you have b Additional child tax credit. Attach Schedule 8812 . 18b nontaxable c American opportunity credit from Form 8863, line 8 18c combat pay, see instructions. d Schedule 3, line 14. . .. 18d e Add lines 18a through 18d. These are your total other payments and refundable credits .. 18e 19 Add lines 17 and 18e. These are your total payments 5,700 V 19 Refund 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 20 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here >o 21a Direct deposit? •b Routing number >c Type: D Checking o Savings See instructions. Account number 22 Amount of line 20 you want applied to your 2020 estimated tax... 22 Amount 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions.. 23

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COMPUTATION OF TOTAL INCOME Note Wages Salary Income Lance H and Wanda B Wages Salaries of both 75000 Business Income 1 24000 To be shown on Schedule ... View the full answer